Position of HOA Trutee Deed

Submitted by Nand S Brar from CA - 07/12/2011 - 11:50am

In the recorded CCR's of an HOA declaration, it is written, "In order to induce lenders and investors to participate in the financing of the SALE OF LOTS AND CONDOMINIUMS in the community, the HOA subordinates its assessment lien to the first mortgage". According to its language it seems that HOA subordinates its assessment lien to the senior most PURCHASE LOAN. So please let me know if the purchase loan is paid off and the owner takes a CASH OUT Refinance loan and this new loan is the only loan, even then this loan will be senior to the HOA assessment lien. Thanks in anticipation.

You are not watching this post, click to start watching

Comments

Submitted by Michelle - 07/13/2011 - 12:03pm

Hi Nand,
That is very interesting. Most HOA's in CA are not pre-liens. The way it is written here would indicate that this HOA is in fact a prelien and would only be subordinate to the purchase money 1st. The reason most HOA's are not a pre-lien is that most lenders would not go behind a HOA lien. I would contact a local title company that has handled these refi or sale transactions to see if you can get clarification. It is not necessarily a deal breaker but you would certainly want to treat this like a property tax lien and figure out what the past due HOA dues are prior to buying at trustee sale.

Post new comment

The content of this field is kept private and will not be shown publicly.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.

More information about formatting options

Before You Post

All comments should be relevant to the topic of the post and are subject to the terms found in our User Agreement.

Asking a Question

If you'd like to ask a new question, please start a new topic.

Please no SPAM.

We nofollow all links and promptly remove unsolicited advertisements - spamming here is a complete waste of your time, so don't bother. Vendors who actually answer questions and provide value to our forums may include links to their company or service as part of their signature.